Valuations for Capital Gains Tax Purposes
Valuations for Capital Gains Tax Purposes
“There is No Need to Panic”
There is no need to panic about getting your Capital Gains Tax (CGT) valuations on or before 1 July 2027. “There is no need to rush”.
The Licensed Valuers at Garmony Property Consultants can undertake Retrospective Valuations at any point time after 1 July 2027, but assess the Market Value as at 1 July 2027 to comply the Australian Tax Office (ATO) Valuation requirements and the Australian Property Institute’s (API) Valuation Standards.
On 12 May 2026, as part of the 2026–27 Federal Budget, the Government announced it would reform negative gearing and capital gains tax (CGT) arrangements.
From 1 July 2027, the Government will replace the 50 per cent CGT discount for individuals, trusts and partnerships with cost base indexation and a 30 per cent minimum tax rate on capital gains. The CGT reforms will only apply to gains accruing after 1 July 2027.
Valuations for CGT purposes.
Getting a Valuation for Capital Gains Tax purposes (CGT) of your investment asset(s) as at 1 July 2027 sets the Cost Base under the Australian Tax Office (ATO) recent CGT Taxation reform.
CGT is triggered when you dispose of an asset, with the Australian Tax Office (ATO) calling it an CGT Event.
The ATO states; “Selling or disposing of an asset will trigger a CGT event and you may have a capital gain or capital loss.”
Therefore, this event may not be triggered for years and therefore the valuation may not be required for years after 1 July 2027. However, from a valuers perspective it is a lot easier to value a property retrospectively within 2-5 years of the date of valuation than 10-20 years after the valuation date. That said, Garmony Property Consultants has a wealth of data for retrospective valuations dating back to 1984 when our company was formed.
The Australian Property Institute (API) recommends, which is supported by the ATO, that “Valuations undertaken by professional valuers are more credible than those provided by someone who isn’t a professional valuer.”
The API further recommends a Comprehensive Inspection Valuation report, is the most reliable and it is the one the API recommends for a value the tax system relies on. This is where the valuer fully inspects the Property.
The API also cautions investors that “Desktop Reports”, where no inspection is carried out, can only provide an indicative value and is not a Valuation Report. “Automated estimates (AVMs)”, such as the price estimates on property websites, involve no valuer at all and are not valuation reports.
The CEO of the API, John Winter stated in a 10 August Media Release that; “Anything less than a full valuation carries real risk if you’re audited,” Mr Winter also said. “A real estate agent’s appraisal is not a valuation. Neither is a free online estimate. If the ATO disagrees with your number, those documents won’t protect you.” John Winter concluded, “A valuations report by a qualified valuer is a small outlay now that protects you against potential disputes over value in the future.”
The Valuers at Garmony Property Consultants are all Certified Practising Valuers and Licensed Valuers in the State of Western Australia.
If you have any queries, regarding Capital Gains Tax Valuations, please speak to one of our expert valuers.
